Several Americans have implemented at least one effective Social Security strategy to help fund their retirement.
However, the rules surrounding Social Security can be complex, and there are various strategies that you can use to maximize your benefits.
This is a representation photo showing a Social Security stub and US Banknotes. Americans may use at least one Social Security Strategy to bankroll their retirement. (Photo by Tetra Images via Getty Images)
Social Security Strategy: How to Bankroll Retirement
Here are some of the most effective Social Security strategies that can help you bankroll your retirement.
Delay Taking Benefits
One perfect example of a Social Security strategy, according to The Motley Fool, is to delay taking benefits. The longer you wait to start receiving benefits, the higher your monthly payments will be.
For each year you delay taking benefits past your full retirement age, your monthly payments will increase by 8% until you reach age 70. Delaying your benefits can help you maximize your monthly payments and provide you with a higher income in retirement.
Claim Spousal Benefits
If you are married, you may be eligible for spousal benefits. Spousal benefits can be up to 50% of your spouse’s full retirement benefit.
If your spouse has a higher benefit than you do, it may make sense for you to claim spousal benefits instead of your own benefits.
You can claim spousal benefits as early as age 62, but your monthly payments will be reduced if you claim before your full retirement age. This is one Social Security strategy that would bankroll your retirement.
File and Suspend
Another Social Security strategy, according to a Nasdaq report, is to file and suspend. This strategy allows one spouse to claim spousal benefits while the other spouse delays their benefits.
The spouse who delays their benefits can then claim a higher monthly payment when they eventually start receiving benefits.
Filing and suspending can be an effective way to maximize your Social Security benefits and increase your retirement income.
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Coordinate Benefits
If both you and your spouse are eligible for Social Security benefits, it’s important to coordinate your benefits.
You can maximize your benefits by coordinating your claiming strategies to ensure that you both receive the maximum benefit possible.
This may involve delaying benefits, claiming spousal benefits, and using other Social Security strategies to increase your income in retirement.
Consider Taxation
Social Security benefits may be subject to federal income tax, depending on your income.
Up to 85% of your Social Security benefits may be taxed if your income exceeds a certain threshold.
To minimize your tax liability, another The Motley Fool report suggest another Social Security strategy to help you reduce your taxable income, such as contributing to a tax-deferred retirement account.
In conclusion, Social Security is a valuable source of income that can help you bankroll your retirement.
By understanding the rules and implementing effective Social Security strategies, you can maximize your benefits and increase your income in retirement.
Whether you choose to delay your benefits, claim spousal benefits, file and suspend coordinate benefits, or consider taxation, there are numerous strategies that can help you make the most of your Social Security benefits.
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